The Working Group on "FPI Regulations", under the Chairmanship of H.R. Khan, has submitted its report to Securities and Exchange Board of India (SEBI).
About:
Background: SEBI had constituted a working group In March 2018 under the Chairmanship of H.R. Khan, Deputy Governor (Retired), Reserve Bank of India (RBI).
Mandate of working group: To advise SEBI on redrafting the SEBI (Foreign Portfolio Investors) Regulations, 2014 for simplification.
Key recommendations proposed by the working group:
Ease of access: Fast track on-boarding process for select category II FPIs, pension fund to be considered for category I FPI registration, deemed broad based status for insurance/ re-insurance entities, simplified registration for multiple investment manager (MIM) structures, entities established in the international financial services centre(IFSC) be deemed to have met the jurisdiction criteria for FPIs, etc.
Simplification of documentation: removal of ‘opaque structure” definition, simplified KYC documentation for category III FPI etc.
Review of Investment restriction: Liberalized investment cap, harmonization between investment restrictions in FPI regulations and FEMA 20(R), reclassification of investment from FPI to FDI, permitting FPIs for off-market transactions etc.
Other aspects: Alignment between FPI and alternative investment fund (AIF) routes, strengthening of offshore derivative instrument (ODI) framework, etc.
Way ahead: The recommendations of the report have been incorporated in the draft FPI Regulations. Comments from public are invited on the draft FPI Regulations till June 14, 2019.
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